Question: Please see attached Suppose the utility maximization problem facing a consumer is given by: Maximize utility: U = x1X2 Subject to a budget constraint: ]

Please see attached

Suppose the utility maximization problem facing a consumer is given by: Maximize utility: U = x1X2 Subject to a budget constraint: ] = P X, + P2 X2 Suppose also that the Lagrangian of the utility maximization problem is L = X1X2 + A(1 - Pix1 - P2X2) Now suppose, again, that the following represent the solution to the consumer's utility- maximizing problem (the optimal bundles): xi = X2 1 = 2P1 2 P2 2P1P2 a. How would you interpret ? b. Suppose ] - 15. By how much will the maximum value of the objective function change if income/wealth increases by $1

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